Best Buy needs no introduction, the brand has been associated with offline retail for several years. As per a recent report by CNBC, Best Buy is planning to close all of its 250 smaller-format mobile stores. The news came to light after Best Buy CEO Hubert Joly mentioned the plans in an internal memo.
That being said the move is only aimed at closing the smaller formats of Best Buy stores, the ones that typically span over an area of 1,400 sq.ft. Most of these mobile stores were placed in places like malls and others in open-air strip centres.
As per the CEO of Best Buy, the revenue from the mobile stores accounts to only 1 percent of the Best Buy’s total real estate footprint and 1 percent of the overall electronics sales. It is also quite possible that mobile retail margins are dipping and the business, in general, is not as profitable as it once used to be.
“We believe the best way to serve customers is to sell phones in channels where they have access to our whole range of connected devices.”- Best Buy CEO Hubert Joly.
Best Buy will be offering the employees a chance to find another role internally or an option to shift to an “in-home advisor” role. In case the employees decide to leave the company severance package would be paid out. Best Buy had opened its first mobile store way back in 2006.
That being said it is not just Best Buy that is closing its mobile stores, other retail giants like Walmart and Sear Holdings have also announced that they will soon be pulling the shutters. On a brighter side, Best Buy has clarified that its store in Canada and Mexico will be spared this move and will be unaffected whatsoever.